Discover practical financial planning strategies for disabled adults to enhance stability and security. Read our guide for actionable tips and insights.
If you or a loved one has a disability, you know that navigating money matters presents unique challenges. Beyond typical financial concerns, you often face a difficult reality: higher living costs paired with potential income limits.
According to the National Disability Institute, people with disabilities typically face significant extra monthly expenses—a financial pressure that can make saving and building wealth much harder. This guide offers key financial planning strategies created specifically for you and the disability community.
We'll show you how to make the most of government benefits, set up effective special needs trusts, and use other specialized financial tools to build lasting financial security while protecting essential support systems.
Individuals with disabilities face unique financial hurdles. Their income might be limited, and they usually need more money for medical care and daily living.
Many people with disabilities find it hard to get jobs. This means they often have less money coming in. Jobs that are available may not pay well or offer enough hours. For many, this makes living costs hard to cover.
Government programs like Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) can help. They provide money each month for those who qualify. But getting these benefits can take a long time and might not cover all expenses.
Next, we'll look at how government benefits can make a difference.
Higher medical costs affect people with disabilities and their families. These individuals often face ongoing health conditions. This leads to frequent doctor visits, therapy sessions, and treatments.
Costs for medications can add up quickly too. Many families struggle to pay these bills along with regular living expenses.
Living costs can be higher as well due to special needs. Some require assistive technology or supportive housing, which can strain a family's budget. Everyday items may cost more, making it tough to save money or build financial assets.
Parents of children with disabilities need proper planning for these challenges. Every little bit helps with managing finances better.
Families deserve support in their journey.
Several critical government programs can provide vital support for people with disabilities. Programs like SSI, SSDI, and Medicaid offer monthly payments and medical coverage to help meet financial needs.
SSI helps people with disabilities. It provides monthly payments to eligible individuals who have limited income and resources. This program supports adults and children living with a disability, including those with developmental or intellectual disabilities.
SSI can help cover basic needs like food, shelter, and clothing.
To qualify for SSI, applicants must meet specific eligibility requirements set by the Social Security Administration. Most importantly, an individual's countable income must not exceed $967 per month, or $1,450 for couples. Notably, the first $20 of any income and the first $65 of earned income, along with half of subsequent earnings, may be excluded from these calculations.
Families often rely on this financial aid to manage medical expenses and other costs associated with caring for a disabled person.
After understanding Supplemental Security Income (SSI), let's look at Social Security Disability Insurance (SSDI). SSDI helps people with disabilities who have worked and paid into Social Security.
It provides monthly payments to individuals with disabilities, helping them meet their needs.
To qualify for SSDI, you must have a disability that meets the Social Security Administration's definition, specifically one that prevents substantial gainful activity (SGA) and is either expected to last at least one year or result in death. For 2025, the SGA limit is $1,620 per month for non-blind individuals and $2,700 for blind individuals.
Families can apply for this support, making financial planning for disabled adults easier.
Medicaid and Medicare help many people with disabilities. Medicaid provides coverage for low-income individuals, including those on Supplemental Security Income (SSI). It offers medical services and support that can ease financial burdens.
Medicare mainly helps older adults but also supports younger people with disabilities after a 24-month waiting period following their entitlement to SSDI benefits. Coverage begins earlier for individuals with End-Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS).
Families must understand these benefits to make the best choices. Knowing how to use them can greatly impact a family's financial health. Special needs families should look into these options carefully.
ABLE Accounts are a great way to save money without losing benefits. You can put away funds, tax-free, for things like education and health care. In 2025, the annual contribution limit to an ABLE account is $19,000. Additionally, working account owners who do not participate in an employer-sponsored retirement plan may contribute an extra amount from their earnings, up to $15,060 for residents of the continental U.S., $18,810 for Alaska, and $17,310 for Hawaii.
To open an ABLE account, you must meet certain criteria. You need to have a significant disability that started before age 26, increasing to before age 46 starting January 1, 2026. This includes developmental disabilities and other conditions.
You also need to be eligible for public benefits like SSI or SSDI, but this isn't always required. Only one account can exist per person, but anyone can contribute to it.
Next, let's talk about the tax-free savings benefits of these accounts!
ABLE accounts offer tax-free savings benefits for individuals with disabilities. These accounts help families save money without losing access to essential government programs like SSI and Medicaid.
Funds in an ABLE account can be used for qualified expenses, such as medical care, education, or housing.
The best part? Earnings grow tax-free. This means you keep more of your money over time. Using these accounts allows families to build a financial safety net while planning for their child's future needs.
With proper use of ABLE accounts, parents can provide better lives for their children with special needs.
Special Needs Trusts help families set aside money for a disabled loved one. These trusts protect eligibility for government benefits, like SSI and Medicaid.
Special Needs Trusts (SNTs) come in different forms to meet various needs. They are categorized into first-party and third-party trusts. A first-party SNT is funded with the beneficiary's own assets, while a third-party SNT is funded with assets from someone other than the beneficiary, such as family members. They help protect assets while allowing individuals to receive government benefits.
Discretionary trusts give trustees power to decide how funds are spent on behalf of a disabled person. Third-party trusts come from family or friends who want to support their loved one but keep them eligible for benefits.
Each trust has its own rules and can fit different needs in special needs planning.
Trusts serve a crucial purpose in maintaining benefit eligibility. First-party Special Needs Trusts are subject to Medicaid payback provisions, meaning that upon the beneficiary's death, remaining funds may be used to reimburse the state for Medicaid benefits received. However, third-party Special Needs Trusts are not subject to this requirement. They allow families to set aside money for a disabled child without affecting their benefits like SSI or Medicaid.
Using these trusts, families can provide extra support without losing access to vital programs.
Both options help manage cash flow and offer special services that enhance life quality.
Estate planning is key for families with special needs. It helps manage care and finances for loved ones.
A power of attorney (POA) gives someone legal authority to act on another's behalf. It allows someone to make decisions for another person. This can be vital for adults with disabilities who may need help managing their money and health care.
A family member or a trusted friend usually takes on this role.
With a POA, the appointed person can handle financial matters, sign checks, and even manage investments, excluding the management of Social Security benefits, as the Social Security Administration requires the appointment of a Representative Payee for this purpose.
This arrangement protects the interests of people with special needs, helping them maintain government benefits like Medicaid or SSDI while getting needed assistance in their daily life.
Selecting the right guardian is a crucial decision for families planning for a child with a disability. This person will help make decisions about care and finances. It's important to pick someone who understands the individual's needs.
Consider setting up both financial and medical powers of attorney, and explore alternatives such as Supported Decision-Making, which allows those with disabilities to make decisions with the support of trusted individuals, promoting greater independence.
Special needs trusts can protect funds while keeping eligibility for government benefits, like SSI or Medicaid, intact.
Think carefully about these choices; they shape the future for individuals with disabilities and ensure their well-being.
Building a financial safety net takes planning and effort. Saving early can help individuals with disabilities secure their futures, while caregivers should think about retirement plans too.
A strong financial safety net is vital for people with disabilities. It guards against unexpected costs. Start by establishing a Special Needs Trust (SNT) and saving money in an easy-access account. This approach not only secures funds for emergencies but also ensures that assets are managed without affecting eligibility for government benefits like Medicaid and Supplemental Security Income (SSI).
Investing in long-term care insurance can also be smart. Life insurance gives extra peace of mind too. Caregivers should think about retirement planning, as their work is demanding and often unpaid.
They need to save for themselves while providing care for special needs children or adults. By creating a plan now, families set up support for any future challenges—and that helps everyone feel secure!
Caregivers often neglect their own financial future. They spend much time caring for a child or adult with disabilities. This can make retirement planning hard. It's vital for caregivers to save money now, even if they feel stretched thin.
There are different ways to prepare for retirement. Investing in an IRA or 401(k) and considering an ABLE account can help build savings. Caregivers should also think about long-term care needs as they age. Finding a certified financial planner (CFP) who understands these unique challenges can be helpful too.
They can guide families on how to balance caring and saving without losing sight of the financial impact ahead. Next, let's explore finding professional support for better guidance.
Finding the right help can make a big difference. Navigating financial planning for people with disabilities comes with unique challenges, from understanding government benefits to managing long-term savings.
Certified financial planners (CFPs) and special needs financial advisors specialize in creating strategies that protect income, maximize savings, and ensure financial security. They can help you set up tools like ABLE accounts or special needs trusts while guiding you through tax planning and available resources. Finding an advisor with expertise in disability planning makes it easier to make informed decisions and secure a stable financial future.
A Farther financial advisor can provide personalized support, helping you make informed decisions and optimize resources for long-term stability. With experience in disability planning, they simplify the process so you can focus on what matters most.
Don't navigate these challenges alone. Talk to an advisor today to build a plan that works for you.
Financial planning is vital for people with disabilities. Understanding programs like SSI and SSDI helps you secure steady income, while ABLE accounts let you save tax-free without losing benefits. Special needs trusts offer powerful protection for your eligibility for essential aid.
Estate planning ensures your specific wishes are legally documented and respected. Building long-term savings provides crucial safety nets for both you and your caregivers. Financial experts who understand disability planning can guide you through these complex systems with clarity.
These strategies directly improve your financial security and independence. Connect with local disability nonprofits or specialized advisors who understand your unique situation. By taking control of your finances today, you create real opportunities for greater choice and peace of mind tomorrow.
Financial planning for people with disabilities involves consulting with a team of professionals, like an investment advisor and tax professional, to create a comprehensive financial plan that considers the individual's needs and resources.
Nonprofit organizations, such as the Special Needs Alliance, connect individuals with specialized attorneys knowledgeable in disability and public benefits law. While they do not offer direct financial advice, their referrals can be integral in effective money management for people with disabilities.
A third-party trust is created by someone other than the person with a disability to ensure that care is provided without affecting eligibility for means-tested government benefits such as Medicaid and Supplemental Security Income (SSI).
You should work closely with a financial advisor who understands how complex these issues are—they'll guide you through creating a long-term care plan that ensures your child's future needs are met.
Yes! With guidance from an investment advisor well-versed in handling finances of those receiving monthly payments due to disability, it's possible to grow your money while keeping within regulations set by Department of Health Services.
Absolutely—tax-advantaged accounts, such as ABLE accounts, offer significant benefits like tax-free growth on investments and tax-free withdrawals for qualified disability expenses. It's important to note that contributions are made with after-tax dollars and are subject to annual contribution limits, enhancing the ability to save for disability-related costs efficiently.
